How Do You Deal With It?

[Tsaiko]

Taxes. Are collectables taxed the same as income or do they fall into another category?

Zero becuse it is gifted. Also as long as you are pursuing a hobby and not a busuness then you have no liability

[DaveH]

I was under the impression that profits made on "sports collectibles" were taxable and not at the 15% capital gains rate either but at the 25% rate. And it doesn't matter if you just considered it a hobby.

dh

[calvindog]

Originally Posted by Pup6913

Zero becuse it is gifted. Also as long as you are pursuing a hobby and not a busuness then you have no liability

Ummm...unless one of you guys stayed in a Holiday Inn Express last night I might suggest speaking with a T & E attorney first.

[ChiefBenderForever]

If it's a hobby and under $10,000.00 then no taxes from what I understand.

[Jim VB]

Tsaiko,

This is the wrong place to get GOOD advice on a tax issue. Follow Jeff's suggestion and consult a professional.

[Tsaiko]

Originally Posted by Pup6913

Zero becuse it is gifted. Also as long as you are pursuing a hobby and not a busuness then you have no liability

It's my understanding that a auction house will issue a tax form (1099?), so if one omits that form from their taxes they will have some splaining to do.
I'd imagine that no one wants to go face to face with the government.

[Jacklitsch]

It seems to me, notwithstanding Calvin's comment, that if you "inherit something you inherit it with a valuation as of the date of death or six months thereafter. This is called a "stepped-up basis"

Then if you sell it, assuming you sell for the value so determined above, you incur no taxable event.

I could be wrong but then I've never stayed at a Holiday Inn Express.

[Tsaiko]

Originally Posted by Jim VB

Tsaiko,

This is the wrong place to get GOOD advice on a tax issue. Follow Jeff's suggestion and consult a professional.

Thanks Jim, good advice, I've talked to two already (casually though). GOOD may be the operative word here
Still like to hear any personal experiences though.

[Leon]

As Jeff said you guys really, really, really need to speak to a CPA licensed in your state. Anytime you make over $600, from a source, they have to report it to the IRS. I don't think auction houses have to report as there is no cost basis, but you still would. Anytime you make a profit you need to report it. Follow those few things and you are probably close to being correct.....

[Jim VB]

Even this advice I would take with a grain of salt. Rates, income levels, etc., seem to change annually.

http://www.sportscollectorsdaily.com...ould-know.html

[Jim VB]

Originally Posted by Jacklitsch

It seems to me, notwithstanding Calvin's comment, that if you "inherit something you inherit it with a valuation as of the date of death or six months thereafter. This is called a "stepped-up basis"

Then if you sell it, assuming you sell for the value so determined above, you incur no taxable event.

I could be wrong but then I've never stayed at a Holiday Inn Express.

Steve,

I "think" your statement is correct (I'm not a tax guy either, however.) But your scenario brings in another point to consider. I would guess that most people don't officially "inherit" baseball card collections. I bet most go through from generation to generation, without the close scrutiny of any kind of probate. I realize it's rare (non-existant in 2010) but there may be a liability due even at that point. Since they aren't officially valued as part of an estate, assigning a value after the fact is dicey.

[barrysloate]

I once auctioned a tobacco card collection that was inherited by the consignor. At the end of the auction, instead of writing a check made out to him, I made it out "to the estate of..." In this way, the heirs did not have to pay tax on it.

But I am not an accountant, I'm just passing along how this was handled.

[DaveH]

I doubt you are going to get anyone to say how they handle taxes on sales of their collectibles. Most probably don't deal with it with the belief that they aren't going to get caught and certainly don't want to say it on a public forum.

dh

[Tsaiko]

I don't expect anyone to tell their secrets, of course, but can anyone tell what tax form you get from an auction house?

Much like asking different Doctors their opinion, accountants seem to have varying interpretation of the codes.

[WarHoundR69]

In New York State you get a Form 1099 for any auction sale over $600.00.

Well I just got one.

[Jim VB]

Originally Posted by Tsaiko

I don't expect anyone to tell their secrets, of course, but can anyone tell what tax form you get from an auction house?

Much like asking different Doctors their opinion, accountants seem to have varying interpretation of the codes.

There really aren't that many interpretations, and if the one you got sounds too good to be true... it's probably wrong.

Whether or not you get a 1099 is irrelevant. Your liability exists even if the auction house does not send a form. The IRS is tightening the code however. Starting in 2011, even Ebay and Paypal will be required to file Form 1099 for each merchant that has at least $10,000 in gross sales and 200 transactions.


But, I emphasize, even if you have gross sales of $9900 or transaction less than 200, your liability is the same.

The 1099 is an aid to you, but not getting one is not a legal defense.

Keep good records. Get a good accountant.

[Tsaiko]

Thanks guys, I really appreciate your time and advice. I understand liability - boy do I -, but was not up on collectibles and all the variables associated with it.
Of course I must hire a great CPA/Estate Planner, but I thought there might be a few incidental tid bits to be had that might help.

Like the SCD article. I didn't even consider adding up the expenses incurred in keeping this collection safe and intact for 50 years.

[autograf]

I've sold large lots through at least a couple of the larger auction houses and never received a 1099 form. It may be the state I'm in (confusion) or some other variable but never received one.

[Leon]

Originally Posted by autograf

I've sold large lots through at least a couple of the larger auction houses and never received a 1099 form. It may be the state I'm in (confusion) or some other variable but never received one.

Just a guess but since the auction house doesn't have a cost basis they don't know if there is a profit, hence no 1099. Of course if you made a profit it still has to be reported by you. (not aimed at you Tom, just making an example, though if you made a profit..... )

[Cat]

How Do You Deal With It?

Step 1: Never discuss it on a public board.

Step 2: Repeat step 1





...and that's coming from someone WHO THINKS he declares everything correctly.

[PolarBear]

Originally Posted by Cat

Step 1: Never discuss it on a public board.

Step 2: Repeat step 1

...and that's coming from someone WHO THINKS he declares everything correctly.

Best advice so far.

[Jim VB]

Originally Posted by Leon

Just a guess but since the auction house doesn't have a cost basis they don't know if there is a profit, hence no 1099. Of course if you made a profit it still has to be reported by you. (not aimed at you Tom, just making an example, though if you made a profit..... )

Leon,

A 1099 is not intended to deal with the "profit", just a notification that there has been a disbursement of cash. When you sell a house, you get a 1099 showing the sales price. It's your job as the filer to show what your cost basis was.

[Leon]

Originally Posted by Jim VB

Leon,

A 1099 is not intended to deal with the "profit", just a notification that there has been a disbursement of cash. When you sell a house, you get a 1099 showing the sales price. It's your job as the filer to show what your cost basis was.

And that is why I have a very good CPA

[prewarsports]

I graduated Law Schoo as a Tax Attorney (but I dont work as one) and spent a little while working for the IRS so I have a little insight into this. Steve is right about the "Stepped Up Basis". If your grandfather paid $1 for a 1933 Goudey Baseball card and he sells it the day before he dies for $1000, he has taxable income of $999. If he dies and you inherit it and the Fair Market Value (stepped up basis) is $1000 and then you sell it for $1000, your taxable income on the transaction is Zero. It is like you paid what the fair market value is.

How you handle the income part is tricky and professionals will disagree. There are several different options all of which are completely legal and this is where you need to consult a CPA.

If you are selling inherited Sports Collectibles and they are not worth huge amounts of money, you are going to owe very little in taxes if anything is the basic answer.

Rhys Yeakley

Non-Bar-Certified Tax Attorney

[Fred]

Enough with non-sense. The easiest thing to do is give it to ME. Let me worry about all of the taxes and stuff that we all ignore. Don't get caught up in this "what if" game. Email me privately and I'll provide you with my mailing address. It will be the end of all of your concerns...